What Is ROAS (Return on Ad Spend) in Print-on-Demand?

If you’re new to profit tracking, start with our guide: How to Calculate POD Profits (Step-by-Step). It breaks down the full formula. If you want to see your real ROAS live with costs included, learn more at PodVector. For ad platform basics, see Meta’s official ROAS documentation.

What Is ROAS?

ROAS stands for Return on Ad Spend. It measures how much revenue you earn for each dollar spent on ads. For example, a ROAS of 3.0 means you made $3 in sales for every $1 spent on ads.

In POD, ROAS is often used to judge campaign performance. Sellers check it to decide whether to scale, cut, or tweak ads.

ROAS Formula

The basic formula for ROAS is:

ROAS = Revenue from Ads ÷ Ad Spend

Example: If you spent $500 on Facebook ads and those ads generated $2,000 in revenue, your ROAS is 4.0.

Example: ROAS in Action for POD

Let’s say you sell POD hoodies at $50 each. You spend $1,000 on ads and get 100 orders:

• Revenue: 100 × $50 = $5,000
• Ad spend: $1,000
• ROAS: $5,000 ÷ $1,000 = 5.0

On paper, that looks great. But here’s the problem: ROAS doesn’t show profit. It ignores printing, shipping, transaction fees, and refunds.

Why Raw ROAS Can Be Misleading

Many POD sellers make the mistake of chasing high ROAS. But a campaign with “good ROAS” can still lose money. Here’s why:

• Costs are ignored: A $50 order might cost you $25 to fulfill (COGS + shipping).
• Refunds aren’t counted: If 10% of those hoodies are returned, you lose both revenue and fees.
• Fees pile up: Shopify and PayPal take ~3% + $0.30 per order. That’s ~$230 lost on 100 orders.
• Ad overlap: Some sales would have happened organically, even without the ad spend.

That’s why advanced POD sellers focus on profit after ads, not just ROAS.

Better Metrics: GPAM & POAS

Two better ways to track marketing efficiency in POD are:

1. GPAM (Gross Profit After Marketing)

GPAM measures profit after subtracting both COGS and ad spend. It tells you what’s left to cover fees and overhead. This is more useful than raw ROAS because it’s tied to real profit.

2. POAS (Profit on Ad Spend)

POAS goes one step further: it divides profit (not revenue) by ad spend. Example: if you spent $1,000 on ads and cleared $500 in profit, your POAS is 0.5. That means you lost money. If you cleared $2,000 in profit, your POAS is 2.0—very strong.

We’ll cover POAS in detail in a separate post: What Is POAS in Print-on-Demand?

What’s a Good ROAS in POD?

There’s no universal “good ROAS.” It depends on your margins and costs. But here are rough benchmarks:

• Breakeven ROAS: Usually around 1.8–2.2 for POD sellers (depends on AOV and COGS).
• Healthy ROAS: 3.0–4.0. Typically leaves you with operating profit margin in the 5–10% range.
• Excellent ROAS: 4.5+. This usually means you’ve priced well, optimized ads, and are scaling profitably.

Instead of aiming for “the highest ROAS,” aim for sustainable ROAS with 5–10% operating profit margin.

How to Track ROAS Efficiently

1. Start with ad platform reports. Get spend and revenue from Meta, Google, or TikTok.
2. Add costs. Pull COGS and shipping from Printify/Printful.
3. Include fees & refunds. Add Shopify transaction fees and refund losses.
4. Calculate GPAM and POAS. These show real performance beyond ROAS.
5. Check weekly. Small cost shifts can turn a profitable campaign into a money-loser.

You can do this in spreadsheets, but it takes time. Tools like PodVector automate ROAS, GPAM, and POAS tracking in real time.

FAQs

What’s the difference between ROAS and POAS?

ROAS = revenue ÷ ad spend. POAS = profit ÷ ad spend. POAS is more accurate because it shows whether ads are truly profitable after costs.

Is ROAS the same as ROI?

No. ROI includes all business costs and investments. ROAS only looks at ad spend versus revenue.

What’s the fastest way to improve ROAS?

Improve product margins (higher AOV, lower COGS), refine targeting, and cut underperforming ads quickly.

Can a campaign with good ROAS still lose money?

Yes. If your margins are thin, you can have a high ROAS but still end up with low or negative profit.

How often should I check ROAS?

At least weekly. Daily checks are useful when running heavy ad spend or during Q4 holidays.